IMF C-Grade for India’s GDP Data: What It Means and What Comes Next

IMF Rating on India’s GDP Data Latest News

• The IMF’s 2025 annual staff report for India has once again given the country’s national accounts, including GDP data, a C-grade, indicating that the statistics have “some shortcomings” that hinder effective economic surveillance.
• This assessment comes even as India’s GDP growth unexpectedly rose to 8.2% in July–September, the highest in six quarters and above the 7.8% recorded in April–June. 
• The stronger-than-expected data has revived familiar questions about the reliability and interpretation of India’s GDP numbers.
• With the IMF highlighting concerns over statistical quality and economists surprised by the sharp growth, the debate on the credibility and meaning of India’s GDP figures has resurfaced.

Why the IMF Evaluates India’s Data

• The IMF assesses India’s economic statistics as part of its annual Article IV consultations, during which an IMF team visits the country, reviews economic developments, and prepares a detailed report. 
• This includes a Data Adequacy Assessment to judge whether India’s data is sufficient for effective economic surveillance.

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What the IMF Said in Its 2025 Assessment

• The IMF stated that India would benefit from better quality, availability, and timeliness of macroeconomic and financial statistics to support policymaking.
• While acknowledging India’s efforts to update GDP and CPI series, the IMF recommended:
  • Regular revisions of national accounts and price indices
  • Conducting the overdue population census on priority
  • Timely publication of combined Centre–State fiscal data
  • Improvements in coverage and consistency of key statistics
• India responded that improvements were underway, with new GDP and CPI series expected in February 2026, and argued that this warranted higher ratings.

Ratings Given by IMF

• Despite India’s submissions, the IMF retained the same ratings as in 2024:
  • National accounts: C grade
  • All other categories: B grade
  • Overall rating: B

What the IMF Grades Mean

• IMF ratings run from A to D:
  • A – Data fully adequate for surveillance
  • B – Data broadly adequate, with some shortcomings
  • C – Data has shortcomings that somewhat hamper surveillance
  • D – Data has serious shortcomings that significantly hamper surveillance
• India’s C rating for national accounts means the IMF sees notable issues in GDP data coverage, granularity, or methodology that limit robust analysis, even though other datasets are broadly acceptable.

IMF Ratings Before 2024: How India’s Data Was Seen

• The IMF introduced its four-tier data adequacy rating system only in 2024. India received a B overall rating that year for the first time.
• Before this system, India’s data was described as:
  • “Broadly adequate” from 2017 to 2023
  • “Adequate for surveillance” in 2016
  • This shows a gradual decline in confidence over time.

Why 2015 Became a Turning Point

• India last updated its GDP base year in 2015, shifting to the 2011–12 series.
• The new numbers surprised economists and even IMF staff, who noted:
  • Large revisions to historical data
  • Short time span of the new series
  • Major discrepancies between GDP by activity and GDP by expenditure
• These issues complicated economic interpretation and contributed to growing concerns about data reliability.

Reasons Behind the IMF’s Gradual Downgrade

• In 2023, IMF staff said the 2011–12 base year is outdated and should be updated urgently. This had been a repeated recommendation.
• A persistent criticism has been India’s use of the Wholesale Price Index (WPI) instead of a Producer Price Index (PPI) to deflate nominal GDP.
• This affects the accuracy of real GDP calculations, since WPI is not fully representative of producer-level prices.

What Comes Next for India’s Official Statistics

• New GDP Series Launch in February 2026
  • MoSPI will release the new GDP series with 2022–23 as the base year on February 27, 2026.
  • This series is expected to include methodological improvements and new data sources.
  • The first numbers released will be:
    • Q3 2025–26 GDP (Oct–Dec 2025)
    • Second advance estimate for FY 2025–26
• Updated CPI Inflation Series
  • A revised CPI series will be introduced earlier, on February 12, 2026, based on:
    • The 2023–24 Household Consumption Expenditure Survey
    • 2024 as the new base year
  • This will replace the current CPI series based on the 2011–12 survey.
• Other Major Statistical Updates
  • Additional updates planned under the statistical overhaul include:
    • A new Index of Industrial Production (IIP) with 2022–23 as the base year
    • Expanded and modernised datasets across sectors to align with current economic structure
• More Frequent Balance of Payments Data
  • The Reserve Bank of India plans to publish monthly Balance of Payments (BoP) statistics, including the crucial current account balance, instead of only quarterly updates.
  • This will improve the timeliness and granularity of external sector monitoring.

Source: IE | MC